Having access to a bank account is non-negotiable for most Canadians. With everything trending digital — from our bills to the way we shop — it’s helpful to have access to your currency digitally, rather than carrying cash around.
And consumers prefer paying for items and services with debit cards or cheques, according to a 2023 payment methods survey conducted by Statistics Canada. And as more businesses begin accepting debit cards over cash, more Candians who may remain unbanked will find themselves in need of a bank account.
While some bank accounts come with monthly fees and other expenses, there are many no-monthly fee bank accounts that can keep your money safe.
What do Bank Accounts in Canada Offer?
A chequing account is the primary account most Candians hold. This serves as the central hub for your money, with your paychecks coming into this account, and bills, rent/mortgage payments, and other expenses coming out. You typically receive a chequebook and debit card that’s linked to your chequing account to make paying for purchases easier.
A savings account is an additional account that you can link to your chequing account to house money earmarked for specific goals, like saving for a home down payment or family vacation.
Depending on the bank, you might have a branch in your area where you can receive in-person customer assistance. Most bank accounts also offer an online platform and mobile app where you can access your accounts.
Many of the most popular banks in Canada, including the big six banks, often charge monthly fees to maintain a chequing account. However, many online banks offer chequing services free of charge.
Common bank account fees
One reason why some Canadians may be reluctant to open a bank account is because of the high fees, particularly those associated with chequing accounts.
Many of the most popular banks charge a few different fees to help maintain your account. Some common fees include:
Costs can range from around $4 to over $30, depending on the bank and the account type. Some banks let you waive this fee if you meet certain requirements, like maintaining a specific balance or receiving a certain amount in direct deposits each month.
Note: Watch out for banks that advertise no monthly fee, but charge you a minimum balance fee if you don’t maintain a set balance.
If you still receive physical bank statements by mail, your bank might charge you this monthly fee. It’s typically only a few dollars, but it can add up throughout the year.
Banks may allow you to make a certain number of transactions per month for free. If you go over this number, they may charge a transaction fee. This varies by bank and account type.
If you need access to cash from your bank account and you don’t use your bank’s ATM, you might be hit with a total ATM fee of between $1 to $9.
You might face a non-sufficient funds (NSF) fee if you try to use your debit card or write a cheque and you don’t have enough money in your account to cover the balance. If the bank doesn’t cover the charge for you, and it’s declined, you might be charged an NSF fee. Most NSF fees run between $40 and $50 per transaction.
Similar to NSF fees, if you don’t have enough money in your account when you make a purchase, if the bank covers the charge, you may face an overdraft fee. Not only will you need to replace the amount the bank covered, but you may also have to pay an overdraft fee, and interest on the amount that was loaned to you. Some banks offer overdraft protection to avoid the above at a lower fee.
What is a No-Fee Bank Account?
A no-fee bank account is one that doesn’t charge the same number of fees as traditional Canadian banks. Many online banks are able to offer no- or lower-fee bank accounts, because they don’t have the same overhead costs as banks with physical locations. This allows them to pass some of these cost-savings down to customers in the form of no fees or better savings interest rates.
Most online banks in Canada have no monthly fees, no NSF fees, and may offer unlimited transactions so you don’t have to worry about transaction fees either. Depending on the bank, you might also save on ATM fees and receive overdraft coverage for free, or at a lower cost. Some examples of no-monthly fee banks include Tangerine and Alterna Bank,
Benefits of No-Fee Bank Accounts
A no-fee bank account can offer you peace of mind. Not only are you not paying to store your money with a bank, but you’re also more likely to have access to better features and perks, like higher savings interest rates and more robust digital tools.
Since you’re not paying a fee for your banking services, you can instead put the money you’re saving toward other financial goals. And with higher savings rates, that means you’ll earn even more interest on your deposits.
You also won’t have to worry about maintaining a set balance to avoid fees or pay a hefty charge if you accidentally overdraft on your account. No-fee accounts offer you more grace, so you can focus on your finances without juggling multiple bank fees.
And some online bank accounts even offer interest-earning checking accounts with no fees. So not only are you saving on monthly bank fees, but you’ll actually make money on your balance.
Courtney is a professional writer, editor and financial literacy enthusiast. You can find her writing on CNET, Investopedia, The Motley Fool, Yahoo Finance, MSN and The Balance. She spends her free time exploring different cities across the globe or enjoy some downtime with her two cats and one dog.